In a recent announcement, Ripple (XRP-USD) has revealed that it has added three partners to its cross-border payments platform xRapid. The product enables financial institutions to move fiat across borders swiftly unlike the traditional means which takes more than two days to transfer.
This move is a major boost to Ripple’s digital token XRP, which has long been criticized for lacking utilities. The partnerships aim for a healthy ecosystem for the token and may notch up the token’s worth against main competitors.
Facilitating xRapid payments
According to the press release, the company has partnered with Bittrex, Bitso, and Coins.ph which are cryptocurrency trading platforms form the USA, Mexico and the Philippines respectively. The announcement reveals that Bittrex will be the preferred crypto exchange for xRapid transactions happening in the US or happening in terms of the US dollar. Across the border in Mexico, Bitso will be preferred in transactions moving in Mexican pesos while further in the Philippines, Coins.ph will be the preferred exchange for transactions moving the Philippine peso.
This way, transactions over the xRapid platform will be able to seamlessly move from one currency into XRP and then rapidly converted into another.
For instance, moving money from the United States to the Philippines will be reduced to a few minutes when a financial institution that has an account with Bittrex launches a transaction in US Dollars through xRapid. The US Dollars will be converted into XRP which is settled over the XRP ledger system. In the Philippines, Coins.ph will then convert the XRP into pesos which is finally settled to the recipient through a local bank.
Reducing transaction cost
While the move is targeted at building strategic relations with major financial institutions around the financial world, the Ripple block network is also interested in cutting down the cost of cross-border transactions. According to the press statement, the cost is estimated to be cut from 70% to around 40%. In addition, the statement notes that the transaction time will be reduced from around 2-3 days to just a matter of minutes.